J-S06033-22
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DING GU AND SHEN NONG, USA, : IN THE SUPERIOR COURT OF
INC. : PENNSYLVANIA
:
Appellants :
:
v. :
:
YANQUN ZHONG-ARDITO AND CORE :
ACUPUNCTURE, LLC :
:
Appellees : No. 1593 EDA 2021
Appeal from the Order Entered July 19, 2021
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): 2010-02207
BEFORE: KUNSELMAN, J., McLAUGHLIN, J., and KING, J.
MEMORANDUM BY KING, J.: FILED APRIL 20, 2022
Appellants, Ding Gu and Shen Nong, USA, Inc., appeal from the order
entered in the Philadelphia County Court of Common Pleas, denying their
petition for a temporary restraining order and preliminary injunction. We
affirm.
The relevant facts and procedural history of this appeal are as follows.
On April 1, 2019, Yanqun Zhong-Ardito and Core Acupuncture, LLC
(“Appellees”) entered into a contract with Appellants. The contract permitted
Appellees to operate Appellants’ acupuncture business for a term of five (5)
years. (See Answer to Complaint and New Matter, filed 6/8/21, at Exhibit
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A1).1 At the time of the contract, Appellants utilized a retail location at 926
Arch Street in Philadelphia (“the property”).
On February 7, 2020, Appellants’ landlord provided notice of its intention
to terminate Appellants’ lease for the property. The notice stated, “The lease
term has expired with no notice to renew by you and this letter will provide
notice you must vacate the premises.” (Response to Petition for Preliminary
Injunction, filed 6/22/21, at Exhibit B). The landlord also indicated that the
parties needed to vacate the premises by April 30, 2020. (See id.) Fearing
imminent displacement, Appellees vacated the property on May 1, 2020. (See
N.T. Hearing, 7/13/21, at 60). Appellees subsequently found a new retail
location on the same block, at 908 Arch Street, and they resumed business
operations. (Id. at 23, 61).
On October 29, 2020, Appellants commenced a civil action against
Appellees by filing a praecipe for writ of summons. Appellants filed a
complaint on April 10, 2021. Among other things, the complaint alleged that
Appellees “improperly removed [Appellants’] client list and patient medical
records … from the [property] and converted said business records for
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1 The parties’ contract was written in Chinese. (See Answer to Complaint and
New Matter at Exhibit A). In their answer to the complaint and new matter,
Appellees included copies of the original contract, as well as a version that
was translated into English. The translation included a certificate explaining
“that this translation was prepared by professional translator(s) and
proofreader(s), and was not produced by a computer software program.” (Id.
at Exhibit A1).
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[Appellees’] own use and benefit thus severely prejudicing [Appellants].”
(Complaint, filed 4/10/21, at ¶18). The complaint included counts for
conversion, tortious interference with prospective contractual relations,
breach of contract, and related claims. On June 8, 2021, Appellees filed an
answer and new matter asserting that their actions did not violate the parties’
contract.
On June 11, 2021, Appellants filed a petition for temporary restraining
order and preliminary injunction. In it, Appellants reiterated their allegation
that Appellees “improperly removed [Appellants’] client list and patients’
medical records and business records” from the property. (Petition, filed
6/11/21, at ¶5). Appellants requested that the court order Appellees to, inter
alia, return all original and copies of the patient files and business records.
Appellees filed a response to Appellants’ petition on June 22, 2021. Appellees’
response cited a provision in the parties’ contract that permitted Appellees to
take ownership of the patient files if Appellants’ lease for the property “expires
for any reason[.]” (Response to Petition for Preliminary Injunction at ¶3).
On July 13, 2021, the court conducted an evidentiary hearing on the
matter. At the hearing, both parties presented witnesses. The court also
received argument from counsel. By order and opinion entered July 19, 2021,
the court denied Appellants’ request for injunctive relief. In its opinion, the
court recognized that Appellants bore the burden of establishing six (6)
elements before it could grant injunctive relief. The court found that
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Appellants “cannot meet their burden of demonstrating they are likely to
prevail on the merits.” (Order and Opinion, filed July 13, 2021, at 3)
(unnumbered).
On August 4, 2021, Appellants timely filed a notice of appeal. That same
day, the court ordered Appellants to file a Pa.R.A.P. 1925(b) concise statement
of errors complained of on appeal. Appellants timely filed a Rule 1925(b)
statement on August 25, 2021.
Appellants now raise one issue for this Court’s review:
Should the Superior Court reverse the trial court order
because Appellants established each of the six general
elements required for injunctive relief?
(Appellants’ Brief at 6).
On appeal, Appellants contend that they established each of the six
general elements required for injunctive relief. Regarding the trial court’s
conclusion that Appellants are unlikely to prevail on the merits, Appellants
insist that “Appellees’ activity is actionable and its wrong is manifest;
Appellants’ right to relief is clear.” (Id. at 16). Appellants maintain that this
case “involves textbook conversion, in that Appellees wrongfully took
Appellants’ patient files out of [the property] and will not return them.” (Id.
at 17). Appellants further argue that Appellees unilaterally breached the
contract by taking the patient files. Appellants acknowledge the contract
provision that allowed Appellees to take ownership of the files if Appellants’
lease with the landlord expired. Appellants insist, however, that they did not
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actually have a lease with the landlord when the parties executed the contract
in April 2019. According to Appellants, “That lease never existed, so it never
expired. Therefore, Appellees had no right under the contract to assume
ownership of patient files and records.” (Id.) Appellants conclude that this
Court must reverse the order denying their request for injunctive relief. We
disagree.
This Court reviews a trial court’s ruling on a request for a preliminary
injunction for an abuse of discretion. See Weeks v. Department of Human
Services, 656 Pa. 492, 501, 222 A.3d 722, 727 (2019).
Under that standard, we … will affirm the denial of preliminary
relief if the trial court had any apparently reasonable grounds for
its action. Such grounds exist when the court properly found that
any one of the prerequisites was not satisfied. Only if it is plain
that no grounds exist to support the decree or that the rule of law
relied upon was palpably erroneous or misapplied will we interfere
with the decree.
Id. (internal citations and quotation marks omitted).
A court can grant a preliminary injunction when the moving party
establishes the following six elements:
(1) relief is necessary to prevent immediate and irreparable
harm that cannot be adequately compensated by money
damages; (2) greater injury will occur from refusing to grant
the injunction than from granting it; (3) the injunction will
restore the parties to their status quo as it existed before
the alleged wrongful conduct; (4) the petitioner is likely to
prevail on the merits; (5) the injunction is reasonably suited
to abate the offending activity; and (6) the public interest
will not be harmed if the injunction is granted.
Brayman Const. Corp. v. Com., Dept of Transp., 608 Pa. 584, 601, 13
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A.3d 925, 935 (2011).
“To support a claim for breach of contract, a plaintiff must allege: 1) the
existence of a contract, including its essential terms; 2) a breach of a duty
imposed by the contract; and 3) resultant damage.” Pittsburgh Const. Co.
v. Griffith, 834 A.2d 572, 580 (Pa.Super. 2003), appeal denied, 578 Pa. 701,
852 A.2d 313 (2004).
In interpreting the terms of a contract, the cardinal rule
followed by courts is to ascertain the intent of the
contracting parties. If the contractual terms are clear and
unambiguous on their face, then such terms are deemed to
be the best reflection of the intent of the parties. If,
however, the contractual terms are ambiguous, then resort
to extrinsic evidence to ascertain their meaning is proper.
A contract’s terms are considered ambiguous if they are
subject to more than one reasonable interpretation when
applied to a particular set of facts.
Commonwealth by Shapiro v. UPMC, 652 Pa. 322, 341-42, 208 A.3d 898,
909-10 (2019) (internal citations and quotation marks omitted).
Instantly, Chapter 5, Article 12 of the contract stated:
This contract is effective during the period of the five-year
property lease contract (from January 1, 2019 to December
31, 2024) between [Appellants] and [their] landlord. If the
five-year property lease contract between [Appellants] and
the landlord expires for any reason or because [Appellees
are] not willing or not able to continue to operate the
business, [Appellants] will transfer the ownership and use
rights of all patients and their medical records to [Appellees]
free of charge. After that [Appellants] shall have no right to
use or transfer any patient data.
(Answer to Complaint and New Matter at Exhibit A1).
At the evidentiary hearing, the parties elaborated on the circumstances
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surrounding Appellants’ lease with their landlord. Appellant Ding Gu testified
that Appellants did not actually have a lease for the property when he signed
the contract on April 1, 2019. (See N.T. Hearing at 19). Rather, Appellants
had been operating under a lease that expired in February 2019, and they
were actively negotiating a new lease with their landlord in April 2019. (Id.
at 31-32). Although Appellants signed a new lease with the landlord on June
12, 2020, Dr. Gu admitted that he received notice from the landlord asking
him to vacate the space before Appellants executed the new lease. (Id. at
35). Appellee Yanqun Zhong-Ardito also testified and explained that she
believed Dr. Gu “was talking to the landlord to renew the lease” for the
property. (Id. at 60). Nevertheless, Appellees vacated the property on May
1, 2020. (Id.) Dr. Zhong-Ardito did not believe that she had any other option
but to vacate the property due to Dr. Gu’s inability to finalize a new lease.
(Id.)
The court evaluated this evidence and determined that the parties’
contract permitted Appellees to remove the patient files from the property
under these circumstances:
Looking to the plain language of Chapter 5, Article 12 of the
[c]ontract, the [c]ourt finds that it is evident the parties
agreed that, upon the event that the lease between
[Appellants] and landlord expired, all patients, patient files,
and medical records would and should be transferred to
[Appellees], and in turn, be rightfully in [Appellees’]
possession and control. Due to Article 12 of the [c]ontract,
upon this event occurring as credibly testified during the
July 13, 2021 hearing, [Appellees] then had a possessory
right to all patients, patient files and medical records.
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(Order and Opinion at 4) (unnumbered) (internal footnote omitted). Here,
the court recognized that much of Appellants’ underlying civil action hinged
on an interpretation of the relevant contract provision. In light of the court’s
determination that Appellees complied with the relevant contract provision,
the court concluded that Appellants were unlikely to prevail on the merits.
On this record, we cannot say that the court abused its discretion. See
Weeks, supra. At the hearing, Dr. Gu’s testimony and the letter from the
landlord confirmed that Appellants’ lease for the property was expired during
the period when Appellees moved the patient files. (See N.T. Hearing at 31-
35). Although the parties’ contract anticipated that Appellants would have a
five-year lease for the property running through 2024, the contract
unambiguously called for Appellants to “transfer the ownership and use rights
of all patients and their medical records” to Appellees if the lease between
Appellants and the landlord “expires for any reason[.]” In evaluating this
language, the court provided a reasonable interpretation of the parties’ intent.
See Commonwealth by Shapiro, supra. Thus, contrary to Appellants’
assertions, their right to relief in the underlying action is anything but clear.
See Porter v. Chevron Appalachia, LLC, 204 A.3d 411, 419 (Pa.Super.
2019) (stating, “In a preliminary injunction action, the moving party, in order
to prove that it is likely to prevail on the merits, must establish a prima facie
right to relief”).
We conclude that the court did not commit reversible error in finding
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that Appellants failed to demonstrate that they are likely to prevail on the
merits. See Weeks, supra; Brayman Const. Corp., supra. Consequently,
we affirm the order denying Appellants’ petition for injunctive relief.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/20/2022
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